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Crude Oil Price's Crude Effect on Rice Production.

Malaysia, Apr 18, 2011 - (ACN Newswire) - The impact of crude oil prices has far reaching impacts on the direct and indirect costs involved in rice production. Researchers have mapped crude oil, rice and soybean oil prices between 1970 and 2008 and demonstrate the implications of world crudeoil prices on the agriculture sector, in particular on rice production. The paper, in the Journal of Social Sciences and Humanities (JSSH), also suggests that soybean oil producers do not face the same problem and should not worry about the fluctuation of crude oil prices.

The study used the data of the world crude oil prices and the prices of rice in Malaysia and soybean oil in the Rotterdam market from 1970-2008. An Autoregressive Distribution Lag method was used, which allowed the team toinvestigate both short and long term dynamics. Their findings show that there is a long-term relationship between the world crude oil price and the agriculture sector, with high production costs cutting into profit margins. The authors warn that these: 'situations will become worse if they do not receive any subsidies or incentives from the government'.

About Pertanika Journal of Social Sciences & Humanities (JSSH)

JSSH is published by Universiti Putra Malaysia in English and is open to authors around the world regardless of nationality. It is currently published twice a year in March and September. Other Pertanika series include Pertanika Journal of Tropical Agricultural Science (JTAS) and Pertanika Journal of Science & Technology (JST). Website: http://www.pertanika2.upm.edu.my/jpertanika/index.htm

Contact:

A. S. Abdul-Rahim

Department of Economics

Faculty of Economics and Management

Universiti Putra Malaysia, 43400 UPM, Serdang, Selangor, Malaysia

E-mail: abrahim@econ.upm.edu.my

Tel: +603-8946 7630 | +603-8948 6188.

Mob: +6019-209 0970.

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Publication:ACN Newswire
Geographic Code:9MALA
Date:Apr 18, 2011
Words:292
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